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Adnoc awards $1.34bn Estidama project contracts

3 July 2023

 

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Adnoc Gas, the natural gas processing business of Abu Dhabi National Oil Company (Adnoc Group), has awarded contracts for two key packages of its project to upgrade its sales gas pipeline network across the UAE.

The total value of the two engineering, procurement and construction (EPC) contracts for the project, also known as Estidama, is estimated to be $1.34bn, Adnoc Group said in a statement on 3 July.

UK-headquartered Petrofac has been awarded the EPC contract for package 2 of the Estidama project. Package 2 is understood to be worth $720m, sources told MEED.

A consortium of Abu Dhabi’s National Petroleum Construction Company (NPCC) and Lebanon-headquartered CAT Group has won Estidama package 3, which is valued at approximately $630m, according to sources.

The new pipeline will extend Adnoc Gas’ existing 3,200-kilometre pipeline network to over 3,500km, enabling the transportation of higher volumes of natural gas to customers in the Northern Emirates of the UAE.

“This strategic pipeline extension will drive further growth for Adnoc Gas as it continues to supply sustainable gas supplies in the UAE in support of the company’s strategy to increase its market share and enhance its customer base,” Adnoc said in its statement.

Over 70 per cent of the contracts’ value is expected to flow back into the UAE economy under Adnoc Group’s In-Country Value (ICV) localisation scheme, Adnoc added.

Key Estidama packages

Adnoc Gas Processing, now part of Adnoc Gas, initially intended to issue separate EPC tenders for packages 2 and 5. However, it tendered these as a combined job in June last year. Contractors submitted technical bids for these packages in August 2022.

Eventually, Adnoc Gas divided the scope of work on combined packages 2 and 5, MEED reported in February this year.

Following the revision of the scope of work, Estidama package 2 broadly involves building a new facility at the KP-30 location of the Habshan gas compressor plant (HGCP) and installing three variable frequency drive motor-driven compressors.

Adnoc Gas received technical proposals for Estidama package 2 on 24 February. Contractors submitted commercial bids by 27 March.

Along with Petrofac, the following contractors, among others, are understood to have submitted commercial bids for Estidama package 2:

Package 5 is expected to be tendered separately to contractors as part of a planned second phase of the sales gas pipeline upgrade project.

ALSO READ: Gas takes centre stage in Adnoc downstream expansion

Adnoc Gas issued the main tender for Estidama package 3 in late June last year.

Contractors submitted technical bids for the package in August 2022, while commercial bids were submitted by 21 November.

MEED previously reported that Italy-headquartered Arkad was the lowest bidder for package 3, with a quotation of about $590m. A source close to the project said that following months of “intense negotiations, due diligence processes and evaluation of project delivery capabilities”, Adnoc Gas picked the consortium of NPCC and CAT for the package.

The scope of work on package 3 covers the installation of new gas pipelines from the Habshan complex to the HGCP, and from the HGCP to the Sweihan customer receipt, along with associated facilities.

Sales gas pipeline project packages

Erstwhile Adnoc Gas Processing, now consolidated into Adnoc Gas, initially divided the EPC work on its estimated $2bn sales gas pipeline network enhancement project into seven main packages.

China Petroleum Pipeline Engineering performed the Estidama project’s front-end engineering and design works as part of a contract worth about $6m that Adnoc Gas Processing awarded the Chinese state-owned firm in October 2020.

MEED reported in December 2021 that Abu Dhabi-based contractor Integrated Specialised General Contracting Company (Iscco) had won package 1, which is understood to have a contract value of $18m.

Iscco subcontracted the detailed engineering works on package 1 to the Abu Dhabi branch of Sweden-headquartered consultancy Rejlers.

Adnoc Gas issued the main tender for package 6 and packages 3 and 2+5 in late June last year.

Contractors also submitted technical bids for package 6 in August 2022 and commercial bids by 21 November.

Work on package 6 entails the installation of a 52-inch, 74km pipeline from Sweihan to Al-Shuwaib in Abu Dhabi and building two block valve stations.

Adnoc Gas combined the scope of work on packages 4 and 7, and issued the main tender in November last year.

Contractors submitted technical bids for combined package 4+7 by 27 March. The project operator is yet to call for commercial bids for this package.

The main scope of work on the Estidama combined package 4+7 involves laying a new pipeline from the Al-Shuwaib pig launcher and pig receiver station to the Sajaa gas facility in Sharjah.

The scope also covers building a new gas pipeline between BVS-2/KP28.7 in Abu Dhabi to Dubai’s Margham gas facility to meet increased gas demand from Adnoc Gas Processing’s customer Dubai Supply Authority (Dusup).

“Up to a dozen contractors are likely to have submitted technical bids for [combined package] 4+7,” one source said.

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Indrajit Sen

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